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Agricultural Market Viewpoint with Wandile Sihlobo

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14:54

What underpins food prices in South Africa

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/09/18

The South African government voiced concerns about the higher food prices and instructed the cabinet's economic cluster to implement a food security plan to cushion consumers. We have yet to see the government's strategy and approach. But it is worth highlighting that South Africa's consumer food price inflation has started to decelerate from the high levels of 14,4% we saw in March 2023. In July 2023, consumer food inflation was recorded at 10,0%, from 11,1% in the previous month. The product

14:04

SA agricultural exports remained robust in Q2,2023

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/09/11

South Africa's agricultural exports amounted to US$3.4 billion in the second quarter of this year, up by 0,1% y/y. Despite challenges in key export markets such as the EU in the case of citrus, the products that dominated the export list this quarter were citrus, maize, apples and pears, wine, sugar, soybeans, wool, avocados, pineapples, fruit juices, nuts, and grapes. Importantly, this good export performance was not only a function of price but also improved volumes. The prices of some

13:02

Saudi Arabia is a strategic market for RSA...

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/09/04

The Kingdom of Saudi Arabia was mentioned as one of the countries that are set to join the BRICS in January 2024. This is a major development, and one that offers another avenue for diversifying the geographic destinations of South Africa’s agricultural exports. There is no doubt that South Africa’s agriculture stands to benefit enormously from close cooperation with Saudi Arabia. As chair of the 15th BRICS Summit, South Africa championed the need to deepen trade and investments amongst the BRICS

13:45

The re-opening of beef export markets is positive for SA

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/08/28

One positive development in South Africa's agriculture this past week was the re-opening of the Chinese beef market and the firm establishment of beef access to the Kingdom of Saudi Arabia. The Kingdom of Saudi Arabia has not featured prominently in South Africa's beef export markets in the past, with only small volumes last exported in the early 2000s. The renewed access to this market is critical to South Africa's ambition to expand beef exports, as the Saudi beef market is sizable at over

13:39

SA agricultural exports could soften in 2023

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/08/21

South Africa's agricultural export earnings will likely soften this year from the 2022 record. The lower commodity prices, ongoing restrictions to exports of some livestock products because of the foot-and-mouth disease and the stringent regulations of the citrus black spot disease in the EU market are among some of the factors likely to result in lower export earnings. While SA's agricultural exports have remained relatively solid in the first few months of the year, we are expecting the effects

16:45

What keeps SA agribusinesses up at night

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/08/14

We spent most of July on the road, engaging with Agbiz members and sector role-players in various regions of the country. The feedback about the near-term outlook was reasonably positive in all our engagements, with many attributing their optimism to the favourable 2022/23 summer crop and 2023/24 winter crop seasons. The feedback from the horticulture and wine industries also remained encouraging as various stakeholders forecast growth and expansion prospects in the coming years. The outlook was

15:21

Some observations as we approach South Africa's...

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/08/06

As South Africa's 2022/23 summer cop season draws to a close, the focus is shifting towards the 2023/24 production season, which commences in October. As we stated in our previous notes, the preliminary insights suggest that an El Niño could bring below-normal rainfall, but South Africa could still have a decent season. The improved soil moisture following four consecutive seasons of rain will help support crop and horticulture production as well as grazing conditions. Although there is no

12:36

There are ample grain supplies in the global market

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/08/01

A lot has happened in the agricultural markets over the past few weeks. First, Russia decided not to renew the Black Sea Grain Deal, which is essential to facilitating exports out of Ukraine and has contributed to a decline in global grain prices. Second, India has banned the exports of non-basmati white and broken rice on fears of inflation. Both these events have been quite disruptive to the grain trade. But a few days before these announcements, I wrote a piece mainly distilling the 2023/24

15:55

Russia and India's agricultural policies add risks to...

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/07/23

This past week was dominated by global agricultural events. First, grain exports, specifically from Ukraine, were disrupted when Russia invaded the country in February 2022. But the rising concerns about global food security resulted in the United Nations and Turkey brokering a deal in July 2022 between Russia and Ukraine to allow a safe movement of grain from Ukraine to the world market while the war continued. But this past week, Russia halted the Black Sea Grain Deal. The reasons are not clear

16:42

Risks to feed prices for the SA livestock and poultry...

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/07/18

The livestock and poultry industry has had a difficult last few years. Various external shocks including animal diseases and rising input costs – yellow maize and soybean prices – made for a challenging operating environment for many farmers and agribusinesses. While the spread of diseases may be slowing, and organized agriculture and government continued to collaborate to address biosecurity risks, concerns about renewed increases in animal feed prices persist. This is particularly the case in the

16:53

SA agriculture records a decent trade surplus in Q1,2023

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/07/10

South Africa's agricultural sector had a rough start to the year regarding production and exports. The excessive rains brought production challenges that delayed the summer crop planting activity by roughly a month but later improved. Regarding exports, the slowing agricultural commodity prices reduced profitability from the levels farmers enjoyed a year ago, specifically grains and oilseeds. Moreover, some logistical challenges persisted in Cape Town port and thus negatively affecting the table

14:13

SA has the second-largest maize harvest on record

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/07/03

With summer crop harvest underway across South Africa, the recent production estimates are more reliable and reflect the large yields farmers continue to reap. Hence, we were not surprised when South Africa's Crop Estimates Committee lifted the country's 2022/23 commercial maize production estimate by 1% from last month to 16,35 million tonnes. This crop is 6% more than the 2021/22 season and the second-largest harvest on record. The expected ample harvest is primarily on the back of large yields,

15:08

Zimbabwe may face a significant maize shortfall

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/06/26

From a maize supply perspective, South Africa is in a relatively strong position. According to recent estimates by the Crop Estimates Committee, the country's 2022/23 commercial maize production could reach 16,1 million tonnes, up 5% year-on-year and the third largest on record. Given South Africa's annual maize needs are roughly 12 million tonnes; the country could have over 3 million tonnes for export markets in the 2023/24 marketing year that started in May (this marketing year corresponds with

15:02

Expected El Niño in 2023/24 summer does not...

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/06/19

Forecasts of an El Niño occurrence in the 2023/24 summer season do not necessarily equate to a bad agricultural season. The upcoming season of possible below-normal rainfall, i.e., El Niño, follows a rare consecutive four years of heavy rains that have improved soil moisture and natural grazing veld. This means there is a natural cushion for agricultural activity even if the rains are below the average(typically around 500 mm) in South Africa. What will be necessary, however, is for the showers to

13:55

Why did SA agriculture GDP contract by 12,3% in the...

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/06/12

The numbers released by Statistics South Africa today show that in the first quarter of 2023, agriculture gross value added sharply contracted by -12,3% quarter-on-quarter (seasonally adjusted). There are a few elements that explain this sharp contraction. First, the field crops had a tough start to the season because of excessive rains, which disrupted and delayed plantings by over a month in some areas. Second, the cattle industry still feels the adverse effects of foot and mouth disease,

13:02

Agriculture Master Plan is ripe for implementation

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/06/05

May 2023 marked a year since South Africa's Agriculture and Agro-processing Masterplan was completed and launched. This plan offers the government and the private sector framework to grow the sector, build competitiveness, attract more investment, improve inclusion, and create jobs. This year should mark the start of the implementation phase. But progress so far remains limited, as the focus shifted to energy security at the beginning of the year because of the intensified load-shedding. With

13:53

Ample maize supplies in South Africa

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/05/29

South Africa's Crop Estimates Committee lifted the country's 2022/23 maize production estimate by 2% from last month to 16,1 million tonnes. This crop is 5% more than the 2021/22 season and the third-largest harvest on record. As we stated in the previous notes, the expected large harvest is primarily on the back of large yields, as the area planted is slightly down from the 2021/22 season. About 8,5 million tonnes is white maize, with 7,6 million tonnes being yellow maize. A crop of 16,1 million

11:45

Farm jobs in SA, Black Sea Grain Deal

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/05/22

There was so much happening in agriculture this past week. I want to spotlight one positive domestic matter and a global one. The data released by Statistics South Africa paints an encouraging picture of agricultural employment on the domestic front. In the first quarter of 2023, about 888 000 people were employed in primary agriculture, up 3% q/q and 5% y/y. This is well above the long-term agricultural employment of 780 000. From a regional perspective, the Western Cape, KwaZulu-Natal, and

15:17

Can SA expand its maize export footprint in China?

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/05/15

China cancelled US maize orders and purchased of the South African maize. This was a volume of 108 104 tonnes of maize from South Africa in the last week of March and the first few weeks of April 2023. This activity formed part of South Africa’s maize exports in the 2022/23 marketing year. Some interpreted this market activity as China replacing the United States with South African maize as part of the broader geopolitical matter. We think such a view may be an overstatement. First, South African

11:37

SA is on track for a good winter crop season

Agricultural Market Viewpoint with Wandile Sihlobo ·

2023/05/08

The global wheat market has been in focus since Russia invaded Ukraine in February last year. Many countries feared that they would not meet domestic needs because of supply constraints brought by the war in one of the major producing regions. The price surge after the invasion was also a significant challenge for importing countries such as South Africa. The Black Sea Grain Deal brokered between the United Nations representatives, the Turkish government, and the Russian and Ukrainian governments to

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